Global Islamic insurance seen at $25B by end of 2015 -report

Contributions drawn by the global Islamic insurance sector may reach $25 billion by the end of 2015, largely driven by growth from the Middle East, North Africa and Malaysia, according to a report by consultants Ernst & Young on Wednesday.

Family takaful, or life insurance, will be the main driver of growth given its lack of market penetration in the Gulf. Malaysia leads the global market with contributions of $115.8 million while Gulf contributions amount to $63.5 million.

A study by insurance ratings agency A.M. Best earlier in the month also indicated that family takaful is still under penetrated but offers higher margins and stability.

Global takaful contributions will likely reach $12 billion by the end of 2011 from $9.15 billion last year, Ernst & Young said.

“If we continue with the 2009 growth rate of 31 percent of higher, will clearly touch the $25 billion market in 2015,” said Ashar Nazim, MENA head of Islamic finance services at Ernst & Young in a statement.

“We expect takaful to be the default choice for Islamic countries in the future,” he said.

The takaful market currently makes up only one percent of the global insurance market, despite Muslims comprising 20 percent of the global population.

Highly populated Muslim markets like Indonesia and Indian subcontinent will be future growth markets for the industry as it matures, the study found. (Reporting by Shaheen Pasha, Editing by Dinesh Nair)